Tehran, Oct 18, IRNA – India will pay Iran $900m in two tranches beginning next week to clear part of the past dues for crude oil it buys from the Persian Gulf nation.
Indian refiners, namely Mangalore Refinery and Petrochemicals Ltd (MRPL), Essar Oil, Indian Oil Corp (IOC) and Hindustan Petroleum Corp Ltd (HPCL), will make payment of the first installment of $400m on Monday or Tuesday, sources with direct knowledge of the development said.
The remaining $500m will be paid before November 24. The United States plus five other world powers had in July granted Iran access to $2.8b of its funds held in foreign banks.
This was in addition to $4.2b Iran had received between January and July.
Of the $2.8b, $900m are to come from India, sources said.
Iran and the United States, China, France, Germany, UK and Russia had in July agreed to extend a six-month interim accord until November 24 pending a long-term deal to end their nuclear dispute.
Sources said the $900m have to flow out before November 24.
While the payment of the first installment has been fixed, the date for next will be decided by the Reserve Bank of India (RBI), they said.
Indian refiners had paid the previous $1.65b in three equal installments of $550m each — first on June 26, second on July 8 and third on July 24.
Since February 2013, when the US blocked payment channels to Iran for its nuclear program, India has been paying 45 percent of its Iran oil bill in rupees through a UCO Bank branch in Kolkata. For the remainder, it had been waiting for a way to make the payment.
As much as $4b had been accumulated in past dues. Sources said the payment mechanism used in June/July will again be used to clear $400m dues.
Rupee payments equivalent to $400m will be deposited by Indian refiners in the UCO Bank account, which will now be transferred to the RBI for onward credit to the central bank of the UAE, which will make payments in dirhams to Iran.
Since July 2011, India had been paying in euros for 55 percent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 percent was remitted in rupees through UCO Bank.
The euro payments ceased from February 6, 2013, but the portion of rupee payments continued through UCO Bank.
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